What is Border Trade?

General Introduction To Border Trade

(source: Department of Commerce)

North Eastern India shares land border with Bangladesh, Bhutan, China, Myanmar and Nepal and has agreements of overland trade with these countries through Land Custom Stations notified under Section 7 of the Customs Act, 1962. While for trading through LCSs situated on Bangladesh and Bhutan border, there is a Free Trade Agreement (SAFTA), Border Trade Agreement have been entered into with China and Myanmar.

Border trade is different from trade through air, land or sea ports as trade through ports involves clearance through customs and has large volume. Border trade in contrast is “over-land trade” by way of “exchange of commodities” from a bi-laterally agreed list by people living along both sides of the international border.

For permitting locally produced commodities, to be traded as per prevailing customary practices on both sides of the India-Myanmar border, an agreement on border trade between India and Myanmar was signed on 21st January, 1994 and operationalised on 12th April, 1995. The Agreement envisages that the border trade will take place through Custom Posts at Moreh in Manipur and Zowkhathar in Mizoram, corresponding to Tamu and Rhi in Myanmar. 40 items are permitted for the border trade between India and Myanmar, with 5% duty. Presently, most of the border trade takes place only through the Moreh Post. The details of the border trade between India and Myanmar during the last 5 years are as under:

(Rs. In crore)

Year

Export

Import

Total

2006-07

6.13

2.69

8.82

2007-08

4.94

1.35

6.29

2008-09

1.61

0.76

2.37

2009-10

24.5

8.32

32.82

2010-11

0.26

3.80

4.16

Border trade with Myanmar is quite limited and is generally averaging less than US $ 1 million per year.